|By Nathan Young|
October 13, 2017
If this is your first exposure to Harami patterns, I highly recommend understanding the traditional Harami candlestick pattern. There are many types of patterns out there but this one may be easier to find because it utilizes only two candles. Patterns are not a certain indication of market trends, but rather an alert that there might be a shift in the market.
Diving deeper into this candlestick pattern, let us begin with the first candlestick pattern. Before we begin, this pattern can work in both bearish and bullish trends. For example purposes, let us take this example from a bull market. The first candle in the pattern will have a body that is healthy in size, along with wicks on both ends. The second candle is the important part of this pattern, and that is a doji candle, that appears in the shape of a cross.
When this pattern occurs, it may mean the market is beginning to shift and change trends. The doji represents an indecisiveness in the market because the open and the close are identical. A useful tool to use in comparison is the volume levels. If there is higher volume, this could mean a new wave of market participants is entering the market. Support and resistance indicators are a wonderful way to help increase the chances of finding a valid trend change. Test it out for yourself and see if this is a right fit for you. An easy pattern to find can begin giving you that edge in the market.
|Nathan Young is a Senior Member of Macroaxs Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States. View Profile|
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